Tax incentives
Singapore is well positioned to maintain its economic competitiveness in today’s global environment with a low headline corporate tax rate of 17%, generous tax exemptions for small-to-midsize companies, and industry-specific tax incentives. The Government of Singapore provides a comprehensive package of tax concessions and incentives to businesses whose business activities reflect the direction in which the state plans to steer economic development.
1. Development and Expansion Incentive (DEI)
The DEI encourages Singapore-based companies to move into high value-addition business activities, expand their operations in the country, and procure advanced machinery and equipment by offering a reduced tax in the range of 5%-10% on incremental income derived from qualifying activities.
2. International / Regional Headquarters Award (IHQ / RHQ)
The Regional Headquarters Award and International Headquarters Award provide a reduced corporate tax rate on incremental income from qualifying activities. * Regional Headquarters Award: Under the (RHQ) Award, qualifying companies can enjoy a concessionary tax rate of 15% for five (3+2) years on incremental qualifying income from abroad, instead of the regular Singapore corporate tax rate of 17%. In other words, if applicant company satisfies all the minimum requirements by the third year of the incentive period, it will enjoy the 15% concessionary tax rate for an additional 2 years on qualifying income. This scheme applies to all companies that have their Asia-Pacific headquarters in Singapore. * International Headquarters Award: This tax incentive scheme is open to all entities that have setup a company in Singapore in order to carry out their headquarter activities. More specifically, companies that commit to exceed the minimum requirements of the Regional Headquarters Award, can enjoy an even lower concessionary tax rate ranging from 5% to 15% on incremental income from qualifying activities.
3. Pioneer Incentive
Companies from the manufacturing or services sector that engage in activities that raise overall industry standards may be eligible for full corporate tax exemption on qualifying profits for up to 15 years.
4. Land Intensification Allowance (LIA)
The Land Intensification Allowance provides an initial tax allowance of 25% and annual tax allowance of 5% on qualifying capital expenditure incurred for the construction or renovation/extension of a qualifying building or structure.
5. Integrated Investment Allowance (IIA)
The Integrated Investment Allowance provides an allowance based on a percentage of approved fixed capital expenditure to be incurred on productive equipment that is placed outside Singapore for an approved project.This allowance is granted on top of the normal capital allowance.
6. Mergers & Acquisitions (M&A) Scheme
The Mergers and Acquisitions Scheme provides an allowance of 5 percent of the value of acquisition, subject to a maximum of $5 million for each year of assessment. It also provides deductibility of transaction costs and stamp duty relief. EDB's approval is required for the waiver of the condition that the ultimate holding company for the group must be incorporated and tax resident in Singapore.
7. Finance & Treasury Centre (FTC) Tax Incentive
The Finance and Treasury Centre Tax Incentive provides a reduced corporate tax rate on fees, interest, dividends and gains from qualifying services and activities. It also provides a withholding tax exemption on interest payments on loans from banks and approved network companies for FTC activities. * A concessionary tax rate of 10% on:
(a) All fee income received by the FTC from its subsidiaries, related companies and associates (approved network companies) for the provision of qualifying FTC services and qualifying activities conducted on own account; and
(b) Interest, dividend and gains from transactions in stocks and bonds, foreign exchange trading, interest rate swaps, financial futures and options * Exemption from withholding tax on:
(a) Interest payments on borrowings by the FTC from overseas banks and approved network companies, provided the funds raised are used for the conduct of qualifying FTC activities.
The tax concessions are conferred for a period of between 5 to 10 years, depending on the level of financial and manpower resources committed by the FTC in Singapore. The award may be renewed if the FTC has demonstrated substantial commitments to Singapore. * Approved network companies include companies where at least 25% of the issued capital is beneficially owned, directly or indirectly, by the FTC. Alternatively, at least 25% of the issued capital of the FTC may be beneficially owned, directly or indirectly, by the approved network company.
8. Aircraft Leasing Scheme (ALS)
The Aircraft Leasing Scheme provides a reduced corporate tax rate on income accruing in or derived from Singapore from leasing of aircraft or aircraft engine and prescribed activities. It also provides automatic withholding tax exemption on qualifying payments on qualifying foreign loans for the purchase of aircraft or aircraft engines.
9. Research Incentive Scheme for Companies (RISC)
The Research Incentive Scheme for Companies (RISC) awards government grants to develop research and development capabilities in strategic areas of technology.
10. Initiatives in New Technology (INTECH)
The Initiatives in New Technology (INTECH) Scheme awards government training grants to encourage capability development in applying new technologies, industrial R&D and professional know-how.
11. Land Productivity Grant (LPG)
The Land Productivity Grant seeks to support companies which are interested to optimise land use through domestic or overseas relocation.
The LPG will assist companies by defraying part of the initial cost arising from the relocation. The supportable cost components would be one-time, non-capital expenses related to the relocation.
Funding support for approved projects can be between 10% and 70% of the qualifying costs. The funding support level will be dependent on the amount of land freed up and the remaining lease term. The qualifying costs include: * Relocation costs (i.e. physical movement of Plant & Machinery to new site) * 3rd party consultancy fees for market and location feasibility studies and work flow redesign * Manpower cost of the project manager or Singapore-based staff posted to the overseas site to oversee training of local labour and new facility set-up.

Vietnam CIT incentives
• Large manufacturing projects (except for those manufacturing products subject to special sales tax or exploiting mineral resources) are eligible for CIT incentives if the projects meet either of the following criteria:
(i) having minimum investment capital of VND 6,000 billion, disbursed within 3 years after being licensed, and having minimum revenue ofVND 10,000 billion/annum for at least 3 years after the first year ofgenerating revenue; or
(ii) having minimum investment capital of VND 6,000 billion, disbursed within 3 years after being licensed, and using minimum 3,000 headcount for at least 3 years after the first year of generating revenue.
• New investment projects in industrial zones (except for industrial zones in cities Type 1) are now entitled to CIT incentives. Cities Type 1 include Ho Chi Minh City, Hanoi, Hai Phong, Da Nang, Can Tho, Hue,Vinh, Dalat, Nha Trang, Quy Nhon, Buon Me Thuot, Thai Nguyen, Nam Dinh and Viet Tri.
New investment projects are defined as projects which are carried out for the first time or areindependent of an existing project, except projects established from division, demerger, merger,acquisition or conversion and projects established from a change of owner, or inheriting fixed assets,business location, business sectors from existing enterprises. This definition will likely be a contentious area.
• Business expansion projects are now entitled to CIT incentives if any of the following criteria are met:
(i) they involve additional fixed assets costing at least VND 20 billion (or VND 10 billion if the projects are in certain specified regions with difficult socio-economic conditions); or
(ii) they involve additional fixed assets of at least 20% compared with the period before expansion; or
(iii) they constitute an increase of at least 20% of the designed capacity compared with the period before expansion.

CIT preferential rates, exemptions and reductions CIT Rate | Criteria | Period applicable | CIT exemption* | 50% CIT reduction when CIT exemption period expired* | 10% | Newly established enterprises in:Locations: with specially difficult socio-economic conditions; Economic Zones, High Tech Zone established under PM’s decisionSectors: high technology, scientific research and technology development, investment in development of specially important infrastructure facilities of the State; production of software products. | 15 years from the first year of revenue generation15 years from the first year of revenue generation (maximum 30 years at PM’s approval) | 4 years | 9 years(5 years for newly-established enterprises in the socialization sectors operating in areas other than areas with difficult or specially difficult socio-economic conditions) | | Enterprise operating in the field of socialization (education – training, occupational training, health care, culture, sport and the environment) | During the whole operation period | | | 20% | Newly established enterprise in areas of difficult socio-economic conditions | 10 years from the first year of revenue generation | 2 years | 4 years | 25% | Standard rate for all projects except for projects in the field of oil and gas or rare and precious mineral exploitation, which are subject to 32-50% CIT rates | N/A | N/A | N/A | Certain expenditures of enterprises in manufacturing, construction and transportation for female or ethnic minority labor are deducted from CIT | * The application of tax exemption/ reduction from the first profitable year. 3 year limit is introduced. |

Compare Singapore and Vietnam | Singapore | Viet Nam | Standard CIT Rate | 17 percent | 22 percent | Sectors qualifying for incentives (not exhaustive) | Manufacturing, services, GHQ, RHQ, IHQ, IP Hub, FTC | Exporters and various other industries | Reduced CIT Rates | Development and Expansion Incentive: reduced tax of 5 or 10 percent on incremental income from qualifying incentives | 10, 20, and 25 percent for 10 or more years given certain criteria | Others | Pioneer (manufacturing & services)- tax exemption on income from qualifying activities

Development and expansion incentive- reduced 5 or 10 percent on incremental income from qualifying activities
Approved holding company status-certainty of capital gains treatment for disposal of approved subsidiaries of at least 50 percent shares held for at least 18 months.

Finance and treasury Center Tax incentive- reduced tax 5 percent or 10 percent on fees, interest, dividends and gains from qualifying services/activities; WHT exemption on interest payments on loans from banks and network companies for FTC activities

Approved royalties incentive- reduced WHT 0 percent or 5 percent on royalty payments to access advanced technology and know-how

Approved foreign loan- reduced WHT 0%, 5%, 10% on interest payments on loans taken to purchase productiveequipment
S19B writing-down allowances for IP acquisition-automatic 5-year write-down if legal and econ IPR are acquired; EDB's approval is required if only econ IPR is acquired
S19C writing-down allowances for R&D cost-sharing- 1-year write-down for R&D cost-sharing payments | Profits tax:
Foreign-invested enterprises which reinvest profits earned within three years or more are entitled to a refund in the amount of profits tax paid on reinvested profits

Foreign investors are entitled to water surface rental for period not exceeding 70 years with rent higher than that of domestic-invested enterprises |

References (links) http://www.edb.gov.sg/content/edb/en/why-singapore/ready-to-invest/incentives-for-businesses.html http://www.accaglobal.com/zm/en/student/acca-qual-student-journey/qual-resource/acca-qualification/p6/technical-articles/selected-tax-incentives-in-singapore-.html http://www.guidemesingapore.com/taxation/corporate-tax/industry-specific-tax-incentives http://aric.adb.org/taxincentives/result?country_id[0]=33&country_id[1]=45&class_id[0]=standard_cit_rates&class_id[1]=dividend_withholding&class_id[2]=qualifying_sectors&class_id[3]=tax_holidays&class_id[4]=reduced_cit_rates&class_id[5]=investment_allowances&class_id[6]=others&class_id[7]=sources
http://vietnamembassy-usa.org/basic-page/taxation